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Public Pension Returns Barely Broke Even in Fiscal Year 2016

  • Average performance of 0.6% well below 7.6% target rate
  • Funded ratio 72 percent, little changed from prior year

Public pension fund investments returned only 0.6 percent on average in fiscal year 2016, according to a report by the Center for Retirement Research at Boston College, far lower than their 7.6 percent average target rate.

Lower than expected returns did little to improve the nation’s growing unfunded pension liabilities. Of the 170 plans studied, the average funding ratio was 72 percent for the fiscal year, about the same level as the year before, according to the report. Under new accounting standards introduced in 2014, however, the plans were only 68 percent funded.